China’s producer inflation eases to 14-month low in May

The producer price index (PPI) rose 6.4% year-on-year, the National Bureau of Statistics (NBS) said in a statement, after the 8.0% rise in April, and in line with forecasts in a Reuters poll. It was the weakest reading since March 2021.

The consumer price index (CPI) gained 2.1% from a year earlier in May, in line with April’s growth. In a Reuters poll, the CPI was expected to rise 2.2%.

The world’s second-largest economy has slowed significantly in recent months, hit by strict Covid-19 controls, disrupting supply chains and jolting production and consumption.

China’s cabinet in late May announced a package of 33 measures covering fiscal, financial, investment and industrial policies to revive its economy.

Last month, widespread Covid-19 lockdowns shut factories and stores, choking purchases of metals-intensive products from cars to appliances.

Chinese auto sales grew in May from April but were still down 16% year-on-year, according to the Chinese Passenger Car Association.

The urban jobless rate rose to 6.1% in April, the highest since February 2020 and well above the government’s target ceiling of 5.5%.

Beijing has taken a series of measures from cutting benchmark lending rates to allowing delays on loan repayments to arrest the economic slowdown.

Goldman Sachs last month lowered its 2022 growth forecast to 4% from 4.5%, below China’s official target of around 5.5%.